Supreme Court Upholds Health Reform Law in Landmark Decision

Supporters of US President Barack Obama's signature healthcare legislation celebrate after the US Supreme Court upheld the constitutionality of the Affordable Healthcare Act, outside the Supreme Court in Washington, DC, June 28, 2012.

The Supreme Court on Thursday upheld President Obama’s health reform law, affirming the centerpiece of the sweeping 2010 overhaul of the nation’s medical industries in a landmark 5-4 vote. The deciding opinion, written by conservative Chief Justice John Roberts, held that the requirement that almost all Americans buy health insurance starting in 2014 or pay a penalty, does not violate the Constitution. The Court limited a massive expansion of Medicaid, the federal program that provides health care to the poor, but did not strike it down. That outcome validates the legacy achievement of Obama’s tenure, and puts the U.S. closer to near-universal health coverage than at any time in its history.

WinnersThe Obama Administration. Beyond the obvious matter of being able to move forward with a major set of policies the Democratic party has wanted for decades, the Supreme Court’s stamp of approval on the Affordable Care Act legitimizes Obama’s most visible and far-reaching domestic achievement. It also undercuts Republicans’ charge that the Obama Administration has consistently overreached its authority. The Supreme Court’s decision says the government’s insurance requirement is a tax with precedent. In addition, a vote from right-leaning Chief Justice John Roberts further seals the argument that the law, while politically explosive, is nonetheless constitutional.

The sick and the uninsured. The Affordable Care Act will extend health insurance to some 30 million Americans who currently lack coverage. It will also guarantee the availability of insurance for those with pre-existing conditions and ensure those people don’t pay more than healthy people. Anyone earning up to 133% of the federal poverty level will get free coverage through Medicaid and those earning 133% to 400% (but without access to employer or government insurance) will be eligible for federal subsidies to help them buy policies.

Congressional Democrats. While health care reform will remain a potent political issue – just because it’s constitutional doesn’t mean everyone has to like it – Democratic Senators and House members who voted for the law won’t have to defend themselves against charges that they ran roughshod over the Constitution. Plus, those campaigning this year will be able to publicize the popular elements of the law.

The Court’s political reputation. It’s unlikely that Republicans will charge this High Court with partisanship in the wake of its ruling on Obamacare. But if the court had struck down the law, there were clear signs that many Democrats were going to demonize the justices as overly political, a criticism that’s grown louder in recent years following controversial cases like Bush v. Gore and Citizens United v. FEC.

Mitt Romney. Yes, a major policy Romney opposed has been upheld, which looks like a Romney defeat. But now that the effort to nix the law via the courts has failed, Romney can argue that the only way to get rid of Obamacare is to elect him. That message will resonate with Republicans and independents who intensely dislike the law.

LosersCongressional Republicans. Scores of congressional Republicans formally signed onto legal challenges to Obamacare. House GOP members have also been trying to get rid of the Affordable Care Act via “repeal” votes. Neither effort has done anything to change the status quo. Congressional Republicans can tell voters they tried their best to get rid of Obamacare, but in terms of showing results, they’ve come up short. Still, like Romney, members of Congress up for re-election this fall can argue the only way to get rid of (or slow) Obamacare is to vote for them.

Republican Governors. The Affordable Care Act is a federal law, but it’s written to be largely administered at the state level. Most states with Republican governors put off steps to implement the law while they waited to see what the Supreme Court would do. This has left them far behind states with Democratic governors who were eager to start setting up new programs—like consumer assistance offices—called for by the ACA, and funded by federal grants. Republican states also largely decided not to begin setting up health insurance exchanges, the marketplaces where federal subsidies will be doled out, and where individual and small group insurance policies will be sold. The exchanges won’t begin operating until 2014, but states have to prove to the federal government they’re equipped to run them long before that and some Republican states that have held out might not make the deadline. In these cases, the federal government will step in, set up an exchange and run it. This means these Republicans leaders will have to explain that they inadvertently invited more federal control in their effort to resist Obamacare.

Young People (sort of). The requirement to buy insurance, which has been upheld along with the rest of the ACA, is largely designed to pull currently uninsured young, healthy people into the system.These people often forgo insurance because they make the fairly good bet they won’t incur expensive medical bills and because they don’t have enough earning power to afford policies. Young Americans subject to the mandate are expected to pay more into the insurance pool than they get out, to help subsidize the cost of insuring older, sicker people. Standard insurance policies will likely be more expensive for these people under the ACA than they are now. Still, the ACA allows young adults to satisfy the mandate with low-cost catastrophic health insurance policies if they choose—everyone else will be required to buy standard insurance—and if they’re under 26, they can get insured through their parents’ plans.